Cromwell : CWBU 0% European Real Estate Investment Trust : CWBU 0% (Cromwell E-Reit) on Tuesday (Nov 14) posted an indicative distribution per unit (DPU) of 4.005 euro cents for the third quarter ended September, down 6.9 per cent from the same period a year earlier.

This came as gross revenue and net property income (NPI) fell, based on figures provided to The Business Times.

Gross revenue dropped 4.2 per cent year on year to 53.6 million euros (S$78 million) from 55.9 million euros, while NPI declined 6.6 per cent to 32.2 million euros, from 34.5 million euros in the same period last year.

Distributable income, meanwhile, was 6.8 per cent lower at 22.5 million euros from 24.2 million euros in Q3 2022. (*see amendment note)

The results bring the Reit’s year-to-date DPU to 11.795 euro cents, down 9.2 per cent from 12.995 euro cents in the previous corresponding period.

After adjusting for an absence of income from assets under redevelopment or strip-out works, its DPU was 4.1 per cent lower.

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Net property income (NPI) was 7.6 per cent lower quarter on quarter at 32.2 million euros from 34.9 million euros, while gross revenue was nearly flat at 53.6 million euros, the manager said.

Distributable income was 3 per cent higher at 22.5 million euros, from 21.9 million euros in Q2 2023.

In the year-to-date period, NPI was 1.1 per cent lower at 100.8 million euros.

This was mainly due to the Reit’s divestment of Piazza Affari 2 in Milan, Italy, and an absence of income from office projects currently under redevelopment. Contributions from the non-core Italian assets leased to their government were also lower because of a rent reduction provision, the manager said.

Gross revenue for the year-to-date period was down 0.9 per cent at 161.9 million euros, from 163.4 million euros in the same period a year earlier.

Distributable income fell 9.2 per cent year on year to 66.3 million euros from 73.1 million euros, as finance costs rose 52 per cent due to higher all-in interest rates and more borrowings drawn down during the period.

Cromwell E-Reit’s overall portfolio occupancy stood at 95.2 per cent as at Sep 30, supported mainly by the Netherlands, Italy, France and Germany.

These four core markets continued to account for about 75 per cent of the Reit’s portfolio by value.

The manager noted that the Reit’s weighted average lease expiry improved to 4.6 years as at Sep 30, from 4.4 years in the previous quarter.

“During the third quarter, the sector saw some minor temporary increases in vacancy in France and the Netherlands, with space now being leased,” it added.

Headline aggregate leverage was 41.2 per cent as at end-September, but stands at 37.4 per cent on a pro forma net gearing basis following the completed sale of Viale Europa 95 in October 2023.

The manager said it entered into 336 million euros worth of new debt facilities during Q3, with no debt expiring until November 2025.

Around 91 per cent of the Reit’s total debt book was hedged or fixed as at Sep 30.

Cromwell E-Reit’s units were trading 4.1 per cent or 0.05 euro cent higher at 1.27 euros as at 11.29 am on Tuesday.

*Amendment note: An earlier version of this story stated that distributable income was 6.9 per cent higher instead of 6.8 per cent lower.